View more from the

Bernard Liautaud is cofounder and CEO of Paris-based Business Objects, a $425 million developer of business intelligence software. Here he describes his incremental approach to building a global sales presence:

In their early years, companies often try to create large sales infrastructures as quickly as possible. They look at a market like Texas and say, well, there are 1,000 companies here that we can target, so we need ten sales teams on the ground right away, and each one can deal with 100 companies. But all they’re doing is guessing. They don’t really know what the market will bear. And if they’re wrong, they’ve wasted a lot of money on those sales teams.

When we launched Business Objects back in 1990, by contrast, we started with the smallest sales force possible, defined as a single two-person team per geographic market. So, for example, we deployed one unit—composed of a presales person and a salesperson—in Dallas. We knew they wouldn’t be able to handle all of Texas, but we gave them a detailed formula for selling our products and then observed them for about nine months. When it became clear that there was enough business to support another two-person unit, we dropped one into place. We also used the first unit’s results to create productivity models for other units.

That strategy worked beautifully because it allowed us to grow incrementally and modularly. We just kept replicating these identical units, one in Britain, one in Rome, one in New York, one in San Francisco, one in Chicago. Each time, if the market proved fertile, we would drop in another unit, observe it for six months or so, and then add others, as needed. Our first five-year plan was predicated on building tiny blocks into larger blocks and building those larger blocks into a company.

Today we have more than 500 of these tiny units around the world (although, as a much bigger company, we have combined most of them into larger units, which have become our principal basis of analysis). For companies starting out, the lesson is this: Don’t focus on the size of the market; focus on how much business you can realistically do in that market. Build a model that lets you reach out gradually. And don’t move so fast that you run out of money.

Partner Center

The email and password entered aren’t matching to our records. Please try again, or reset your password. If you have a username from our previous site, start by using that. Please See our FAQ for more.

If you are signing in for the first time on the new HBR.org but have an existing account, please enter your existing user name and password to migrate your account.Please see Frequently Asked Questions for more information.